With the chill finally settling in this autumn, many U.S. homes are updating their routine …
When you’ve invested in a rental property, your priority should be maintaining it to keep your investment in tip-top shape. However, when people are living in any property, wear and tear will occur over time — making it impossible to keep things perfectly pristine. Unless your tenants are robots, small flaws in finishes or faded wallpapers, for example, are unavoidable.
So, as a landlord, how do you distinguish between wear and tear and true property damage? It’s a topic that’s been debated and the limits of each remain fuzzy in terms of hard definitions. To get to the bottom of the debate, we’ve created a guide to make it easier for landlords to decide whether or not a property has been subjected to simple wear and tear or has more serious property damage.
What’s considered normal wear and tear?
After you’ve invested in a home to rent out to tenants, whether it’s a studio or an entire villa, it’s important to keep it maintained. You’re running a business, after all, and your tenants are your customers. This is especially crucial if you want to continue renting it out — it’s your responsibility to ensure the home stays habitable.
As with any house, there will be wear and tear when people are living on the property. “Wear and tear” refers to minor flaws and deterioration that happens over time from regular use. For example, there will probably be slight discoloration in surfaces being used every day. The key part of this definition is ‘regular use’. If your tenants have ax-throwing competitions in the house and damage the walls, that would be an — admittedly exaggerated — type of irregular damage.
Wear and tear is different than property damage as you can deduce from the example above. Property damage harms the functionality and value of a rental property. Damage can be intentional, accidental, or caused by neglect.
Examples of normal wear and tear:
- Small stains on carpeting
- Dingey grout
- Loose door handles or cabinet knobs
- Sunlight-faded surfaces
- Fixture finish wearing out
Examples of property damage:
- Broken tiles on a tile floor
- Large holes in the wall
- Broken mirror
- Missing doorknobs or locks
Note: You can also specify in your rental agreement if renters are allowed to make permanent changes like painting the rooms or hanging frames. If they’re not allowed to make these kinds of alterations, it’s a reasonable expectation a tenant should use alternatives like using Command hooks instead of nails and removable wallpaper instead of permanent. If they break the rules, this could be considered property damage.
When and how can you use a renter’s deposit?
As a landlord, it’s your duty to maintain the condition of the rental property. It’s up to you to distinguish between normal wear and tear and damage. You may run into a dispute with tenants who believe their property damage is actually normal wear and tear. If you decide the damage falls outside of the parameters of “wear and tear”, you can deduct from a tenant’s security deposit.
This is why it’s important to outline in your rental agreement under what conditions the security deposit can be used. In addition, it’s crucial that you and the renter do a walk-through of the property together during the move-in to verbally and physically document any pre-existing damage as well as set expectations for how the property is maintained.
When the tenant officially moves out, perform a move-out inspection. Take photos and make note of any damages.
If and when you find damage on your property:
- Take pictures and list damage
- Itemize how much was spent fixing the damage
- Add up total repair cost
- Deduct from security deposit with an itemized list of repair costs attached
How can you find good renters who will care for your property?
Using screening technology, you can immediately filter out high-risk renters who may damage your property. A good screening process looks into a prospective renter’s rental history, criminal history, and financial history. While screening can’t guarantee you dependable tenants, it can help you weed out the problematic renters right off the bat.
Finding a great renter will save you money in the long run because you will be less likely to endure the costly and lengthy eviction process and avoid having to spend money on marketing and advertising to look for a new tenant.
While there is no hard definition of what constitutes “wear and tear”, your best bet is setting expectations from the outset so your tenants understand what does (and doesn’t) count as property damage. The most important part of renting to tenants is having a paper trail for everything. Make sure the conditions of your property are well-documented in the unlikely case you’ll have to prove it in court. Remember, get everything in writing, keep your receipts, and take pictures so you have adequate evidence should anything go wrong.